Piracy Doesn’t Harm Sales? Fancy That…

by David Klemke on April 2, 2013

We Australians do love to pirate things. Those of us who live here can tell you why: we’re either gouged extensively on the same products sold overseas or we’re subject to incredible delays. The Internet has helped to remedy both these things however with the former being solved by having access to the same shops that everyone else does and the latter eliminating most long delays. Still, even though we’ve come this far, we’re still subject to the same scarcity that just doesn’t need to exist with certain goods, especially ones that can be purely digital.

Our tendency towards piracy hasn’t gone unnoticed by the rights holders overseas but all they’ve done in response is send scorn over our way. There’s been a couple shining examples of what they should do, like the ABC offering episodes of Dr. Who on iView before it shows on TV (that’s no more for this season, unfortunately), but few seem to be following their lead. It seems that, at least for the near future, Australia will be viewed as nothing more than a pirate haven, a drain on the creative world that does nothing but take.

Or will it?

Any avid TV watcher will be aware of the blockbuster series Game of Thrones which just aired episode one of season 3. Whilst the numbers aren’t in yet it’s shaping up to be the most pirated show ever yet again with Australia making up a decent portion of that. You would think then that its publishers would be aghast at these numbers as the current executive thinking is that every download is somehow a missed sale, robbing them of untold millions that should be in their pockets. However an interview with HBO’s President of Programming Michael Lombardo reveals that they’re doing just fine in spite of it and in fact are kind of flattered by it:

“I probably shouldn’t be saying this, but it is a compliment of sorts,” HBO programming president Michael Lombardo told EW. “[Piracy is] something that comes along with having a wildly successful show on a subscription network.”

…

Last month Nikolaj Coster-Waldau, the actor who plays Jaime Lannister in the show, said that although people watch the show online, he hoped they would still go out and buy the DVD or Blu-ray. And guess what? According to HBO, they do.

There’s been a lot of research done into whether or not piracy, with respect to the online kind, is an overall negative influence on creative industries like TV, music and video games. Preliminary studies have shown that music pirates tend to spend much more than their non-pirating counter parts and that appears to extend to other industries. Lombardo’s revelation that the rampant piracy experienced by their flagship series didn’t hurt their DVD sales fits in with this idea as well and it’s incredibly gratifying to see people at the executive finally admitting that piracy isn’t as big of an issue as they’ve made it out to be. Of course he’s well aware that such a position isn’t popular, even within his own company, but at least the seeds of dissent are starting to take root and hopefully it will continue on from there.

History has shown that attempting to eliminate piracy is a fool’s errand and the only reliable way to combat it is to provide a product that is competitive to what they offer. Valve, Netflix et. al. saw this for their respective industries and their success is a testament to the fact that people will pay good money once the price is set at the right point. Companies who attempt to fight this are going to find themselves routinely outclassed by these upstarts and it’ll only be a matter of time before they find themselves on the wrong side of a bankruptcy hearing. So other executives should take note of Lombardo’s stance and consider taking the same view of their own right’s portfolios.